10. ACCRUED AND OTHER LIABILITIES

Accrued liabilities consisted of the following:


	September 30,
	2011		2010
Payroll and related	$	2,628,210	$	1,180,173
Deferred revenue		800		800
Warranty reserve		265,658		235,796
Income tax		—		105,858
Customer deposits		4,543		500
Other		—		9,115

Total	$	2,899,211	$	1,532,242

Other liabilities—noncurrent consisted of the following:


Extended Warranty	6,603		9,310
Deferred revenue—noncurrent	270,141		273,154

Total	276,744	$	282,464

Payroll and related

Accrued payroll and related consists primarily of accrued bonuses and related payroll taxes in accordance with the Company's compensation plan. See Note 12 for additional information regarding the bonus plan.

Deferred Revenue

Deferred revenue at September 30, 2011 included $270,941 collected from a license agreement in advance of recognized revenue. The Company recognizes revenue and reduces deferred revenue on a per unit basis as the license is used by the customer. In the quarter ended June 30, 2011, the Company determined that it was more appropriate to report a portion of the deferred license revenue as noncurrent based on the Company's estimate of revenue to be recognized over the subsequent 12 month period. Accordingly, $270,141 of the total deferred license revenue was reclassified as noncurrent as of June 30, 2011. To conform to this presentation, $273,154 of the deferred license revenue balance at September 30, 2010 was reclassified as noncurrent. The Company does not believe that this reclassification had a material effect on the previously reported financial statements. The Company recognized $3,013 of revenue from this license agreement in the year ended September 30, 2011.

Warranty Reserve

Details of the estimated warranty reserve were as follows:


Years Ended September 30,	2011			2010
Beginning balance	$	245,106		$	248,327
Warranty provision		74,521			69,384
Warranty settlements		(47,366	)		(72,605	)

Ending balance	$	272,261		$	245,106

Short-term warranty reserve		265,658		$	235,796
Long-term warranty reserve		6,603			9,310

	$	272,261		$	245,106

The Company establishes a warranty reserve based on anticipated warranty claims at the time product revenue is recognized. Factors affecting warranty reserve levels include the number of units sold, anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period. In the fiscal year ended September 30, 2011, the Company increased its reserve by $27,155.